 And welcome to FIG's weekly economic and trading update. I'm Mark Bailey and this is Jessica Russett. Mark, last week we had President's Trump first addressed to Congress. We also had stellar numbers on GDP for Australia. Talk us through the key takeouts. Yeah, so in terms of what we saw from Trump, a lot of noise as usual, a lot of rhetoric, a lot of big plans, but not a lot of detail at all, unfortunately. So I think that left mark is disappointed. Having said that, probably just equally as important, we had a lot of regional Fed presidents talking very positively about the economy and the fact that you're likely going to see some interest rate rises fairly soon. So what that meant for the interest rate market is it priced in a chance of a hike in March from 40% and that increased all the way to 90% today. So that's a really big move. In terms of the GDP on Australia, we had a really solid print there. We're still at figures as a firm, still concerned that that doesn't necessarily drive employment and inflation and so we're still reasonably relaxed on the RBA in terms of any kind of hikes. So what has that meant for market sentiment? At the moment, everything is going gangbusters. People are chasing yield. Equities this week, although they did pull back a bit on Friday, have had the longest consecutive days of gains since 1987. And we all know what happened in 1987. We saw the equity market crash. So right now I'm going to call that the equity rally is over. I'm ringing the bell on the top of the market and it's time to move defensive because it's going to happen soon, whether it's in two weeks time, two months time or six months time. It's irrational exuberance. Everybody's chasing yield and I think you've seen that in terms of your sectors as well. Absolutely, that's right. And you've seen that demand for yield and investors chasing yield without regard to risk and I'm sure you've seen the same in some of your sectors that you all covered in Jess. Yeah, that's right. In particular in that US dollar space and one is Kindred Health. Kindred came to market with its reporting season and it beat market expectations. Kindred is the healthcare and post-acute care provider. So it reported a profit of eight cents per share. Market expectation was five cents per share. So that's certainly up exactly. And sales came in at $1.75 billion US dollars and the original estimate was $1.73 billion dollars. So again, it's slight beat as well. Exactly. So just prior to the results, our institutional traders weren't trading the 2023 maturity bond which is the line that we actually do trade in and we're holding their positions and post these strong results, there's certainly not, you know, there's less sellers out there and the price has risen as well. So due to the shortage of the bond in the market and the price increase as well, we have a shortage of supply and the price has increased $7 over the course of the week and a half since the reporting. And that's a huge move in the bond market. For a bond that's quite significant. Exactly. So that's great news for those who, you know, existing clients that hold the bond, they'd be quite happy with their decision to do so. But those trying to get in now, not only are they dealing with a significant move in the price, but also there's a shortage of supply out there as well. So we are continuing to try and find sellers out there and we do expect that once the news settles down on the results that we will be able to uncover some sellers. So Jess, what are your trading highlights from the week? Once again, we traded more actively in the US dollar denominated bonds as opposed to the Australian dollar bonds and that's just due to supply and also opportunity as well. One other US dollar bond where there was an uplift in price was Virgin Australia. Now in May last year, Virgin added one of China's biggest private airline operator to its share registry with H&A Aviation Group taking a 13% stake in the company. As a result of this, the Asian institutional market became familiar with the credit story. That is Virgin and also had appetite for the bond. And so over the course of February, they were buying the 2019 maturity Virgin bond in volume. And as a result of this, it improved the price of it. So we saw over the course of the month, it improved $1.50 in price terms, as you can see on this graph here, for clients, which is a great opportunity for them that they were able to switch out of that, take any profits and then move into other US dollar bonds remaining in that US dollar exposure. We've also seen an uplift in the 2021 maturity bond as well. As a result of that, only because it looked cheaper in comparison, so the private bank out of Asia has purchased some of that as well. So it's another big week. We're expecting next week with releases and data coming through. Talk us through it. Yeah, I think the big data point next week is the non-farm payrolls, which quite strangely isn't coming out on the first Friday of the month, which is today, but next Friday. So that's going to be a key figure for the FOMC and the Fed more broadly to consider in terms of wage inflation, hours work, participation rate, unemployment rate. That's going to be a key part of their dynamics as to whether they do hike in March. I think as well, you're going to get Janet Yellen speaking tonight in Chicago Friday night and also the Fed Vice-Chair Stanley Fish is talking as well. And that's going to be key as well because you've seen a lot of regional Fed Vice-Presidents talking about that the interest rate hike is going to come fairly soon. And so is Yellen going to continue that rhetoric or is she going to pull back slightly? My feel is that she'll continue that rhetoric and maybe when they get to March, maybe the economic data, they don't feel comfortable. They're not sure about Trump and how that's going to react in the economy. So I think they'll probably won't hike in March, but the market is saying, look, it's a 90% chance of that happening. So we'll get a bit more clarity on that over the course of the next week. So Jess, in terms of your week ahead, in terms of trading, what are your expected highlights going to be? On Friday, FIG launched a new issue. It was tapping an existing issue from October of last year where it's an additional $17 million that's being raised for this company. Back in October, it was $13 million worth of bonds. So the focus for us at the beginning of the week is going to be executing trades where clients are selling an existing holding to purchase this new issue. So that will be a focus trying to find buyers for these bonds. And another focus for us will also be in this US dollar high yield space where we're trying to find some new names to add to our direct bond list and expand that offering. So we're looking for where there's value. So maybe where a bond, a company or an industry has been left behind in this rally. And that's also we'll concentrate on. Okay, thanks, Jess. Thank you, Mark. Cheers. And thanks for watching. Tin hats on. Enjoy.